I felt the discussion the class had on Friday morning was incredible. There was a lot of content when we discussed the 4 P’s of marketing, though we were merely just touching the iceburg. The following five takeaways below detail a few things I wanted to touch on:
The first point I wanted to note was the mentioning of odd-cent pricing, such as pricing a good not at $5.00 but at $4.99 or $4.97. The following article from BBC News Magazine (2008) details a few theories into why shoppers fall for this pricing strategy. In short, one theory is because consumers aren’t mentally up for doing quick math on the sales floor. Shoppers categorize price by segments, such as anything under $1, or even $100, even if it’s a one penny difference, and therefore fail to pick up on the small difference. Another theory relates to discount pricing, or at least, creating the impression that a certain item is discounted even if it’s a two cent difference. A final theory the article mentions is due to income pressures, where consumers are more susceptible to prices at $1.99 versus $2.00 because they believe they can save a few by paying a few cents less. I found this article valuable to the point because it suggests a few reasons for why consumers act the way they do to this trick. Marketers can tune in to these perceptions and trigger various emotions or personal circumstances that consumers may be going through, and then have them think they are being smart shoppers when at the end of the day, businesses cash more from quantity of sales than buyers save.
Along with pricing strategy, I also wanted to review two types of pricing Mike quickly mentioned in class: penetration vs. skimming. This article by Neil Kokemuller describes penetration pricing as setting a lower price and defining product benefits “to lure customers only modestly satisfied with existing products.” Skimming is setting a high(er) price, generally for a selective target market, to maximize short-term profits. A positive about using penetration price is that businesses can order more sales volume in bulk and thus receive discounts. Skimming produces high profit margin, which thus covers cost. The article was a good review for me to understand the basic principles of these pricing strategies.
Another point I wanted to dive into further was emotional marketing. Mike stated that at the heart of all marketing campaigns is reaching out and tapping into people’s emotions to buy. So I watched this youtube video from Graeme Newell, a Emotional Marketing Expert, to talk more about it. He states that emotional marketing doesn’t start with the product, but about how the customer wants to feel about him/herself, such as young and energetic. Emotional marketing begins with a feeling, and the product feature demonstrates that feeling. To achieve a successful emotional marketing campaign, begin with the customer’s emotional priorities, then show how the product can make customers feel that certain way.
A fourth point I wanted to look up was servicescape. I had never heard of the term before, and only until it was discussed in class did I realize that I had known it all along, just not the terminology. Servicescape, in my own words, is the physical construction and appearance, both interior and exterior, of a company’s property which users can interact. I found this very detailed video of one person’s investigation at Brisbane House (a hotel in England). The video goes through exterior and interior reviews on aspects of the property that reflects who they are to their customer’s eye. Notes were made on parking space, lighting, seating and seating arrangements, even signage and font choice. All of these aspects fit together to create a personality for the place.
And lastly, the product life cycle is an important aspect all marketers must understand in order to grow and improve their product. This youtube video provides examples of products, each within the different stages of the cycle. The Intro stage includes products such as 3D-television screens, made popular by 3D movies played in theatres. These products are newly introduced or newly reinvented to the changing times and technology. For stage two, Growth, a famous product/service is Snapchat. They have already been introduced, but are still climbing the ladder to maturity as it becomes increasingly more popular, both socially and in sales. Coca-Cola, however, is in the maturity stage–and has been there for a long time. Coca-cola is a company that knows how to maintain its existence in a changing world, and it stays true to itself by focusing on “classic America” themes. Products that are categorized in the Decline stage are rubber bracelets, made famous by Lance Armstrong’s “Livestrong” yellow bands. These were popular in the last decade, but are currently being less popular as sales decline. Having examples of various products and which stage they are in delivers a better understanding of how the life cycle works because we are all (hopefully) exposed to these products, some of us having been there when the product was introduced to when it declined. By associating our experiences with these and other like products, I feel it’s better to capture the true nature of how products are born and “die” in the consumer world.